CGL Pollution Exclusion

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CGL Pollution Exclusion - State by State Survey

Most commercial general liability policies contain exclusions for pollution related losses. Courts are divided in their interpretation of these exclusions. Some courts hold that only traditional environ-mental “pollutants,” such as oil and industrial waste, are excluded. Others interpret the exclusion more broadly, applying it to any substance that could be considered a “pollutant” (i.e. an “irritant or contaminant”) under a plain reading of the term. Finally, some courts approach their interpretation of the exclusionary language in a fact-specific manner. Many courts use one of the following theories to explain their holdings: A. Unambiguous Policy Language Approach

The “unambiguous policy language” approach holds that the plain wording of the pollution exclusion is not limited to traditional “pollutants” and, therefore, any substance that falls within the broad definition of “pollutant” is excluded.

B. Reasonable Expectations of the Insured Approach

The “reasonable expectations of the insured” approach holds that ambiguous insurance terms are resolved based on the reasonable expectations of the insured. Courts that follow this approach believe that the term “pollutant” is ambiguous, and thus requires an interpretation based upon the reasonable expectations of an ordinary insured, limiting the exclusion to traditional environmental pollutants.

This survey is intended to summarize the interpretations of the CGL policy’s pollution exclusion across the fifty states. The following explains each column of the survey. Policyholder Impact This column addresses the impact of relevant case law from the perspective of the policyholder. A green light indicates the law is favorable to policyholders, in that the pollution exclusion has been limited to traditional environmental pollutants. A yellow light indicates caution; the state may have interpreted the term “pollutant” in different ways or may not have addressed the meaning of the exclusion. A red light indicates that the state has adopted an expansive interpretation of the term “pollutant,” such that coverage is more likely excluded. Pollution Exclusion Limited to Traditional Environmental Pollutants This column indicates whether courts in that state have limited the definition of “pollutant” to traditional environmental pollutants.

35 Nutmeg Drive, Ste. 140, Trumbull, CT 06611 P: 203.287.2100 www.sdvlaw.com

Case Law This column identifies relevant case law addressing the state’s treatment of the pollution exclusion. Substance at Issue/Holding This column identifies the substance at issue and briefly summarizes the court’s findings as to whether that substance was considered a pollutant. The information contained in this survey is meant only as a guide; readers are advised to independently verify each state’s laws before relying on the information presented. If you would like further information or wish to discuss any of these issues, please contact the following: - David G. Jordan at (203) 287-2111 or dgj@sdvlaw.com - Jeffrey J. Vita at (203) 287-2103 or jjv@sdvlaw.com - Phil Brown-Wilusz at (203) 287-2107 or pbw@sdvlaw.com

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Alabama

No

Federated Mut. Ins. Co. v.

Abston Petroleum, Inc., 967 So.2d 705 (Ala. 2007)

Gasoline found to be a pollutant

under unambiguous policy language approach.

Alaska

No

Whittier Props., Inc. v.

Alaska Nat’l Ins. Co., 185 P.3d 84 (Alaska 2008)

Gasoline found to be a pollutant

under unambiguous policy language approach.

Arizona

Yes

Keggi v. Northbrook Property and Cas. Ins., 13 P.3d 785 (Ariz. Ct. App.

2000)

Bacteria found not to be a pollutant because the plain language of the exclusion did not include bacteria.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Arkansas

Yes

Minerva Enters., Inc. v.

Bituminous Cas. Corp., 851 S.W.2d 403 (Ark. 1993)

Septic tank back-up found not to be a pollutant because the policy was ambiguous as to the meaning of

“pollutant.”

California

Yes

MacKinnon v. Truck Ins. Exchange, 73 P.3d 1205

(Cal. 2003)

Pesticide used to kill insects found

not to be a pollutant under reasonable expectations of insured

doctrine.

Colorado

No

Mountain States Mut. Cas. Co. v. Roinestad, 296 P.3d

1020 (Colo. 2013)

Cooking grease found to be a

pollutant because exclusion was not limited to “traditional pollutants.”

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Connecticut

Unclear

Compare: Yale Univ. v. CIGNA Ins.Co,

224 F. Supp. 2d 402 (D. Conn. 2002)

with: Nat'l Grange Mut. Ins. Co. v. Caraker, 2006 Conn. Super. LEXIS 815 (Conn. Super.

Ct. Feb. 28, 2006)

In Yale, asbestos was found to be a pollutant under the unambiguous

policy language approach.1

In Nat’l Grange, asbestos was found not to be a pollutant under the

reasonable expectations of insured doctrine.

Delaware

No

Farm Family Cas. Co. v. Cumberland Ins. Co., 2013 Del. Super. LEXIS 427 (Del. Super. Ct. Oct. 2, 2013)

Lead paint found to be a pollutant

under unambiguous policy language approach.

District of Columbia

No

Nat'l Elect. Mfrs. v. Gulf

Underwriters Ins., 162 F.3d 821 (4th Cir.

1998) (Applying District of Columbia law)

Welding fumes found to be a pollutant under unambiguous policy

language approach.

1 The Yale court was addressing a pollution exclusion under a property policy, as opposed to a CGL policy. However, the court examined a number of cases involving CGL pollution exclusions in order to reach its conclusions.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Florida

No

Deni Associates v. State Farm Ins., 711 So. 2d 1135

(Fla. 1998)

Ammonia fumes found to be a

pollutant under unambiguous policy language approach. Reasonable expectations of insured doctrine

explicitly rejected.

Georgia

No

Reed v. Auto-Owners Ins. Co., 667 S.E.2d 90 (Ga.

2008)

Carbon monoxide found to be a

pollutant under unambiguous policy language approach.

Hawaii

Unclear

Apana v.

TIG Insurance Company, 504 F. Supp. 2d 998 (D. Haw. 2007) (Applying

Hawaii law)

Drain cleaner found to be a pollutant under unambiguous policy language approach, but court acknowledged

that whether the total pollution exclusion applied to non-traditional pollutants had not been decided by

the Hawaii Supreme Court.2

2 This case was certified to the Hawaii Supreme Court and then dismissed.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Idaho

No

Monarch Greenback, LLC v. Monticello Ins. Co., 118 F. Supp. 2d 1068 (D. Idaho

1999) (Applying Idaho law)

Mining tailings3 found to be a

pollutant under unambiguous policy language approach.

Illinois

Yes

American States Ins. Co. v. Koloms, 687 N.E.2d 72 (Ill.

1997)

Carbon monoxide found not to be a

pollutant because reasonable expectations of insured would limit

exclusion to traditional environmental contamination.

Indiana

Yes

State Auto. Mut. Ins. Co. v. Flexdar, Inc., 964 N.E.2d

845 (Ind. 2012)

Chemical solvent found not to be a pollutant because policy language

was ambiguous.

3 Mining tailings are "residue separated in the preparation of various products (as grain or ores)." The tailings in this case are the by-products of gold mining and are composed of sand, silt and clay and contain traces of the metals arsenic, antimony, iron, mercury and zinc. Monarch Greenback, LLC v. Monticello Ins. Co., 118 F. Supp. 2d 1068, 1070 n.1 (D. Idaho 1999)

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Iowa

No

Bituminous Cas. v. Sand Livestock Systems, 728

N.W.2d 216 (Iowa 2007)

Carbon monoxide found to be a

pollutant under unambiguous policy language approach.

Kansas

Yes

Westchester Fire Ins. Co. v.

City of Pittsburg, 794 F. Supp. 353 (D. Kan.

1992) (Applying Kansas law)

Malathion pesticide found not to be a pollutant because it was not a

traditional environmental pollutant.

Kentucky

Yes

Motorists Mut. Ins. Co. v. RSJ, Inc.,926 S.W.2d 679,

(Ky. Ct. App. 1996)

Carbon monoxide found not to be a

pollutant because the policy language was ambiguous and

because of the reasonable expectations of insured doctrine.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Louisiana

Yes

Thompson v. Temple, 580 So. 2d 1133 (La. Ct. App.

1991)

Carbon monoxide found not to be a

pollutant under reasonable expectations of insured doctrine.4

Maine

Yes

Nautilus Ins. Co. v.

Jabar, 188 F.3d 27 (1st Cir. 1999) (Applying Maine law)

Hazardous fumes from roofing

materials found not to be a pollutant under reasonable expectations of

insured doctrine.

Maryland

Unclear

Compare: Bernhardt v. Hartford Fire

Ins. Co., 648 A.2d 1047 (Md. 1994);

with: Clendenin Bros. v. U.S.

Fire Ins. Co., 889 A.2d 387 (Md. 2006)

The Bernhardt court held that

carbon monoxide was a pollutant under the unambiguous policy

language approach.

The Clendenin court, while distinguishing Bernhardt on its facts, held that welding fumes

were not a pollutant because the policy language was ambiguous

and the fumes were non-environmental.

4 The Thompson court involved a homeowner’s insurance policy. However, the court examined a number of cases involving CGL policies as part of its analysis.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Massachusetts

Yes

Western Alliance Ins. Co. v. Gill, 686 N.E.2d 997 (Mass.

1997)

Carbon monoxide found not to be a pollutant under reasonable

expectations of insured doctrine.

Michigan

No

Protective Nat'l Ins. Co. v. Woodhaven, 476 N.W. 2d

374 (Mich. 1991)

Pesticide found to be a pollutant

under unambiguous policy language approach.

Minnesota

No

Midwest Family Mut. Ins.

Co. v. Wolters, 831 N.W.2d 628 (Minn. 2013)

Carbon monoxide found to be a pollutant under unambiguous

policy language approach.

Mississippi

No

American States Ins. Co. v. Nethery, 79 F.3d 473, 477 (5th Cir. 1996) (Applying

Mississippi law)

Paint and glue fumes found to be

pollutants under unambiguous policy language approach.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Missouri

Yes

Am. Nat'l Prop. v. Wyatt, 400

S.W.3d 417 (Mo. Ct. App. 2013)

Carbon monoxide found not to be a

pollutant under reasonable expectations of insured doctrine.5

Montana

Yes

Enron Oil Trading &

Transp. Co. v. Walbrook Ins. Co., Ltd., 132 F.3d 526 (9th

Cir. 1997) (Applying Montana law)

“B-G mix”6 found not to be a pollutant because the exclusion was limited to environmental pollutants.

Nebraska

No

Cincinnati Ins. Co. v. Becker

Warehouse, Inc., 635 N.W.2d 112 (Neb. 2001)

Xylene sealant found to be a

pollutant under unambiguous policy language approach.

5 The Am. Nat’l court involved a Missouri tenant’s homeowner’s policy. However, the court examined a number of cases involving liability policies as part of its analysis. 6 “B-G mix” is butane-natural gas mix, also known as “indirect liquids.”

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Nevada

Yes

Century Sur. Co. v. Casino W., Inc., 329 P.3d 614 (Nev.

2014)

Carbon monoxide found not to be a pollutant under reasonable

expectations of insured doctrine.

New Hampshire

Yes

Weaver v. Royal Ins. Co . Am., 674 A.2d 975 (N.H.

1996)

Lead paint found not to be a

pollutant because policy language was ambiguous.

New Jersey

Yes

Nav-Its, Inc. v. Selective Ins. Co., 869 A.2d 929 (N.J.

2005)

Toxic fumes from floor sealant found not to be a pollutant under

reasonable expectations of insured doctrine.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

New Mexico

No

Bituminous Cas. Corp. v. Basin Disposal, Inc., 1989 U.S. Dist. LEXIS 19174 (D.N.M. Apr. 20, 1989)

(Applying New Mexico law)

Benzenes, heavy metals, and hydrogen sulfide found to be

pollutants under unambiguous policy language approach.

New York

Yes

Belt Painting Corp. v. TIG Ins. Co., 795 N.E.2d 15

(N.Y. 2003)

Paint and solvent fumes found not to

be pollutants under reasonable expectations of insured doctrine.

North Carolina

Yes

Auto-Owners Ins. Co. v.

Potter, 105 F. App'x 484, 496 (4th Cir. 2004)

(Applying North Carolina law)

Concentrations of manganese, iron,

calcium, arsenic, barium, and chloride that seeped into water

supply were found not to be pollutants because they were not

traditional environmental pollutants.

North Dakota

N/A

None

No precedent in North Dakota.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Ohio

Yes

Andersen v. Highland House Co., 757 N.E.2d 329 (Ohio

2001)

Carbon monoxide found not to be a pollutant based on the reasonable expectations of insured doctrine.

Oklahoma

No

Bituminous Cas. Corp. v.

Cowen Constr., Inc., 55 P.3d 1030 (Okla., 2002)

Lead found to be a pollutant under the unambiguous policy language

approach.

Oregon

No

K-T Tracy, Inc. v. Allied Ins. Co., 2008 U.S. Dist. LEXIS 68764 (D. Or. Sept. 3, 2008)

(Applying Oregon law)

Gasoline found to be a pollutant under the unambiguous policy

language approach.

Pennsylvania

No

Lititz Mut. Ins. Co. v. Steely,

785 A.2d 975 (Pa. 2001)

Lead paint found to be a pollutant

under the unambiguous policy language approach.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Rhode Island

Unclear

Picerne-Military Hous., LLC v. Am. Int'l Specialty Lines

Ins. Co., 650 F. Supp. 2d 135 (D.R.I. 2009) (Applying

Rhode Island law)

Court adopted a reasonable

expectations of insured analysis but stopped short of finding that

construction and demolition debris could never be pollutants because

the determination was fact intensive.7

South Carolina

Yes

Ngm Ins. Co. v. Carolina's Power Wash & Painting,

LLC, 2010 U.S. Dist. LEXIS 2362 (D.S.C. Jan. 12, 2010) (Applying South Carolina

law)

Paint fumes, vapor, and dust were found not to be pollutants because

the policy language was ambiguous.

South Dakota

No

S.D. State Cement Plant

Comm'n v. Wausau Underwriters Ins. Co., 616 N.W.2d 397 (S.D. 2000)

Cement dust considered a pollutant under unambiguous policy language

approach.

7 The Picerne-Military case involved an issue of whether coverage applied under a pollution liability policy. However, upon assessing whether construction debris was a pollution, the court examined cases involving pollution exclusions under CGL policies.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Tennessee

No

Certain Underwriters at

Lloyd's, London v. Qahtan Mohammed Alkabsh, 2011 U.S. Dist. LEXIS 26593

(W.D. Tenn. Mar. 15, 2011) (Applying Tennessee law)

Gasoline found to be a pollutant under unambiguous policy language

approach.

Texas

No

Nat'l Union Fire Ins. Co. v. CBI Indus., 907 S.W.2d 517

(Tex. 1995)

Hydrofluoric acid cloud produced

by an accidental explosion found to be a pollutant under unambiguous

policy language approach.

Utah

Yes

United Nat'l Ins. Co. v. Int'l Petroleum & Exploration,

2007 U.S. Dist. LEXIS 93429 (D. Utah Dec. 20,

2007) (Applying Utah law)

Hydrocarbon fumes from waste found not to be pollutants because policy language was ambiguous.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional Environmental

Pollutants

Case Law

Substance at Issue/Holding

Vermont

No

Cincinnati Specialty

Underwriters Ins. Co. v. Energy Wise Homes, Inc., 120 A.3d 1160 (Vt. 2015)

Chemicals from spray-foam

insulation found to be a pollutant under unambiguous policy language

approach.

Virginia

No

PBM Nutritionals, LLC v. Lexington Ins. Co., 724 S.E.2d 707 (Va. 2012)

Filter materials found to be pollutants because exclusion was

not limited to “traditional environmental pollution.”8

8 The PBM Nutritionals case was addressing a pollution exclusion under a property policy, as opposed to a CGL policy. However, the court examined a number of cases involving liability coverage in order to reach its conclusions.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Washington

Unclear

Compare: Kent Farms, Inc. v. Zurich

Ins. Co., 998 P.2d 292 (Wash. 2000);

with: Quadrant Corp. v. Am.

States Ins. Co., 110 P.3d 733 (Wash. 2005)

The Kent Farms court held that the exclusion was not meant to apply to personal injuries caused by fuel oil,

because the injury was based on negligence, not environmental harm

caused by pollution.

The Quadrant 4 court held that sealant fumes were pollutants under

unambiguous policy language approach.

West Virginia

No

Supertane Gas Corp. v.

Aetna Cas. & Sur. Co., 1994 U.S. Dist. LEXIS 21602,

(N.D. W. Va. Sept. 27, 1994) (Applying West Virginia

law)

Coal gas fumes found to be a

pollutant under unambiguous policy language approach. Reasonable expectations of insured doctrine

explicitly rejected.

*This survey was prepared in January, 2016. Courts may change their views at any time as the field of insurance law is constantly evolving. Accordingly,

readers are advised to independently verify current case law.

State

Policyholder

Impact

Pollution Exclusion

Limited to Traditional

Environmental Pollutants

Case Law

Substance at Issue/Holding

Wisconsin

No

Hirschhorn v. Auto-Owners Ins. Co., 809 N.W.2d 529

(Wis. 2012)

Bat guano found to be a pollutant

under unambiguous policy language approach.9

Wyoming

Yes

Gainsco Ins. Co. v. Amaco Prod. Co., 53 P.3d 1051

(Wyo. 2002)

Poisonous gas found not to be a

pollutant under reasonable expectations of insured doctrine.

9 The Hirschhorn court involved a homeowner’s policy. However, the court examined a number of CGL policies as part of its analysis.